Wall Street's political letdown

John Authers explains how markets dealt with a day of political drama; the administration's tax cut proposal was poorly received, but the peso fell on rumours that the US will leave Nafta, while proposed changes to net neutrality boosted telecoms stocks.

Transcript

April 26 is in the books here on Wall Street. Here's the New York minute. It's been a day dominated by politics. This is how the S&P 500 moved during the day, rallying on leaks that there was going to be big tax cuts. Then falling after the tax cut was actually announced. And we discovered that there were no countervailing spending cuts to fund the tax cuts. Many in the market think I think accurately, but that has no chance of flying in Congress.

You saw the same trends in the bond market and, as you can see, in the dollar. Gains followed by a sharp loss once we heard the news. If you look at how the highest taxed companies, which stand to benefit most from the tax cuts, have fared compared to the lowest tax-- this is according to Goldman Sachs-- you can see that confidence in a tax cut ebbed away quite a while ago and hasn't really recovered.

Two other big items of news, as you can see Telecoms services companies did very well today. That was because the FCC chairman said he wanted to do away with net neutrality. Meanwhile, the Canadian dollar and particularly the Mexican peso did very badly. That's because there's a leak that the Trump administration wants to leave NAFTA all together. That's the New York Minute.